Preventing Return Fraud in Reverse Logistics—A Case Study of ESPRES Solution by Ethereum

Abstract

With the rapid development of e-commerce services, online retail has evolved from multi-channel to omni-channel in order to provide customers with more services. However, reverse logistics services (returns and exchanges) have become the target of many fraudulent activities, causing a lot of economic losses for many online retail companies. The current challenge of the traditional countermeasure is it requires a lot of manpower and training resources. In this study, we propose ESPRES, a system that adopts blockchain technology to prevent fraudulent behavior in the process of returns and exchanges with the smart contract and multi-attribute decision-support method to help consumers choose a suitable payment program. A practical implication of this study is that by adopting blockchain technology, a great amount of manpower used on determining whether each return or exchange is fraudulent can be reduced since merchants can check the product ownership. In addition, due to the fact that the footprint of goods cannot be forged, it can also prevent counterfeit or parallel imports of goods.

Keywords

• reverse logistics
• return fraud prevention
• blockchain
• ethereum
• e-commerce
• omnichannel logistics